Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site ucla-cs.ARPA Path: utzoo!linus!decvax!ittatc!dcdwest!sdcsvax!sdcrdcf!ucla-cs!ekrell From: ekrell@ucla-cs.UUCP Newsgroups: net.invest Subject: Re: GinnieMae funds Message-ID: <9282@ucla-cs.ARPA> Date: Sat, 22-Feb-86 01:54:53 EST Article-I.D.: ucla-cs.9282 Posted: Sat Feb 22 01:54:53 1986 Date-Received: Mon, 24-Feb-86 21:13:30 EST References: <2437@sdcc6.UUCP> Reply-To: ekrell@ucla-cs.UUCP (Eduardo Krell) Distribution: net Organization: UCLA Computer Science Department Lines: 34 The different yields can be explained by a number of factors. First, some funds invest a certain percentage of their assets in U.S. government securities other than GNMAs (i.e., Treasury Bills, Notes and Bonds). Depending on how much is invested in those securities, the total yield changes. You can check the prospectus of a fund to find out. Some funds (such as the YES fund and others) sell call options against their holdings in an effort to fatten yields. Sometimes the strategy works but if interest rates fall and bond prices rise, the fund gives up valuable capital gains. Again, read the prospectus carefully. These funds are also known as Yield-Enhanced or Yield-Plus funds. Money Magazine lists the top five last month performers (with their one and five year performance) for 7 different bond funds categories. The march 86 issue lists: U.S. Government Bonds Jan 86 1 year 5 years load 1 Fund for U.S. Government Securities 12.8% 15.3% 103.0% none 2 Lexington GNMA Income 12.4 15.9 83.8 none 3 Dean Witter U.S. Government 11.7 13.3 - none 4 Franklin U.S. Government 11.5 13.0 94.8 4.0% 5 Alliance Mortgage Securities 11.5 11.4 - 5.5 Yield-Enhanced Bond Funds Jan 86 1 year 5 years load 1 YES Fund 13.1% 0.6% - 3.75% 2 Paine Webber GNMA 11.8 13.1 - 4.25 3 Van Kampen Merrit U.S. Government 11.5 14.5 - 4.75 4 Kemper Invest. - Port. Gov. Plus 10.7 10.3 - none 5 American Capital Gov. Sec. 9.1 7.7 - 6.75 -- Eduardo Krell UCLA Computer Science Department ekrell@ucla-locus.arpa ..!{sdcrdcf,ihnp4,trwspp,ucbvax}!ucla-cs!ekrell